(1)

For the purpose of consistency, the methodology for calculating market capitalisation should align with the established frameworks used for determining liquid markets under Regulation (EU) No 600/2014 of the European Parliament and of the Council (2) and Commission Delegated Regulation (EU) 2017/567 (3), while adapting to the requirements of Directive (EU) 2025/50. In particular, in accordance with the definition set out in Article 3(1), point (32) of Directive (EU) 2025/50, market capitalisation refers exclusively to the total value of shares admitted to trading on regulated markets or multilateral trading facilities.

(2)

Given that shares may be admitted to trading on multiple trading venues across the Union, it is essential to identify the most representative price source to ensure a consistent and meaningful measure of market capitalisation. Therefore, share prices used for the calculation should reflect actual market conditions and be derived from the most relevant market in terms of liquidity for each instrument, as defined in Article 4(1)(a) of Commission Delegated Regulation (EU) 2017/587 (4). Furthermore, transaction data reported in accordance with Article 26 of Regulation (EU) No 600/2014 and Commission Delegated Regulation (EU) 2017/590 (5) provides an appropriate basis for this determination.

(3)

The number of outstanding shares is a fundamental component in calculating market capitalisation, as it represents the total equity base over which share prices are applied. To ensure consistency, reliability, and alignment with existing reporting practices, this information should be sourced from the data submitted to European Securities and Markets Authority (ESMA) in accordance with Delegated Regulation (EU) 2017/567 for the purposes of determining a liquid market for equity instruments.

(4)

To ensure a harmonised and transparent approach in attributing issuers to Member States for the purposes of market capitalisation aggregation, the legal address of the issuing entity, as recorded in the Global Legal Entity Identifier Foundation database, should be used. In accordance with ISO 17442, this address represents the official registered location of the entity, typically used for regulatory and tax purposes, and therefore provides a sound basis for determining the issuer’s country of operation.

(5)

To facilitate cross-country comparisons and to support the objectives of Directive (EU) 2025/50 in assessing the relative size of Member State capital markets, the market capitalisation ratio should be expressed as a percentage of the market capitalisation of a Member State relative to the total market capitalisation of the Union on the same reference date. This definition, as set out in Article 3(1), point (33), of Directive (EU) 2025/50, ensures consistency and comparability across jurisdictions.

(6)

This Regulation is based on the draft regulatory technical standards submitted by the ESMA to the Commission.

(7)

ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (6),